Director's cuts of film are not generally released to the public, because on most films the director does not have a final cut privilege. The production company, distributors, and/or studio (anybody with money invested in the film) can impose changes that they think will make the film profit more at the box office. This sometimes means a happier ending or less ambiguity, or excluding scenes that would earn a more audience-restricting rating, but more often means that the film is simply shortened to provide more screenings per day.

With the rise of home video, the phrase became more generically used as a marketing term (including things such as comic books and music albums, neither of which actually have directors), and the most commonly seen form of director's cut is a cut where extra scenes are added back in, often making the director's cut considerably longer than the final cut.

Traditionally, the "director's cut" is not, by definition, the director's ideal or preferred cut. The editing process of a film is broken into stages: First is the assembly/rough cut, where all selected takes are put together in the order in which they should appear in the film. Next, the editor's cut is reduced from the rough cut; the editor may be guided by his own tastes, or following notes from the director or producers. Eventually is the final cut, which actually gets released or broadcast. In between the editor's cut and the final cut can come any number of fine cuts, including the director's cut. The director's cut may include unsatisfactory takes, a preliminary soundtrack, a lack of desired pick-up shots etc., which the director would not like to be shown but uses as a placeholder until satisfactory replacements can be inserted. This is still how the term is used within the film industry, as well as commercials, television, and music videos.

The trend of releasing alternate cuts of films for artistic reasons became prominent in the 1970s; in 1974, the "director's cut" of The Wild Bunch was shown theatrically in Los Angeles to sold-out audiences.[1] The theatrical release of the film had cut ten minutes to get an R-rating, but this cut was hailed as superior and has now become the definitive one. Other early examples include George Lucas's first two films being re-released following the success of Star Wars, in cuts which more closely resembled his vision, or Peter Bogdanovich re-cutting The Last Picture Show several times. Charlie Chaplin also re-released all of his films in the 1970s, several of which were re-cut (Chaplin's re-release of The Gold Rush in the 1940s is almost certainly the earliest prominent example of a director's re-cut film being released to the public). A theatrical re-release of Close Encounters of the Third Kind used the phrase "Special Edition" to describe a cut which was closer to Spielberg's intent but had a compromised ending demanded by the studio. As the home video industry rose in the early 1980s, video releases of director's cuts were sometimes created for the small but dedicated cult fan market. Los Angeles cable station Z Channel is also cited as significant in the popularization of alternate cuts. Early examples of films released in this manner include Michael Cimino's Heaven's Gate, where a longer cut was recalled from theaters but subsequently shown on cable and eventually released to home video; James Cameron's Aliens, where a video released restored 20 minutes the studio had insisted on cutting; James Cameron's The Abyss, where Cameron voluntarily made cuts to the theatrical version for pacing but restored them for a video release; and, most famously, Ridley Scott's Blade Runner, where an alternate workprint version was released to fan acclaim, ultimately resulting in a 1992 recut, the first film to use the term "Director's Cut" as a marketing description (and the first time it was used to describe a cut that the director was not involved in preparing).

Once distributors discovered that consumers would buy alternate versions of films, it became common for films to receive multiple releases. There is no standardization for labelling, leading to so-called "director's cuts" of films despite where the director prefers the theatrically released version, or when the director had actual final cut privilege. These were often assembled by simply restoring deleted scenes, sometimes adding as much as a half-hour to the length of the film without regard to pacing and storytelling.

As a result, the "director's cut" is often considered a mixed bag, with an equal share of supporters and detractors. Roger Ebert approved of the use of the label in unsuccessful films that had been tampered with by studio executives, such as Sergio Leone's original cut of Once Upon a Time in America,[2] and the moderately successful theatrical version of Daredevil,[citation needed] which were altered by studio interference for their theatrical release. Other well-received director's cuts include Ridley Scott's Kingdom of Heaven (with Empire magazine stating: "The added 45 minutes in the Director’s Cut are like pieces missing from a beautiful but incomplete puzzle"[3]), or Sam Peckinpah's Pat Garrett and Billy the Kid, where the restored 115 minute cut is closer to the director's intent than the theatrical 105 minute cut (the actual director's cut was 122 minutes; it was never completed to Peckinpah's satisfaction, but was used as a guide for the restoration that was done after his death).

However, Ebert considers adding such material to a successful film a waste.[citation needed] Even Ridley Scott stated on the director's commentary track of Alien that the original theatrical release was his director's cut, and that the new version was released as a marketing ploy.[4] Director Peter Bogdanovich, no stranger to director's cuts himself, cites Red River as an example where "MGM have a version of Howard Hawks's Red River that they're calling the Director's Cut and it is absolutely not the director's cut. It's a cut the director didn't want, an earlier cut that was junked. They assume because it was longer that it's a director's cut. Capra cut two reels off Lost Horizon because it didn't work and then someone tried to put it back. There are certainly mistakes and stupidities in reconstructing pictures." [5]

Another way that released director's cuts can be compromised is when directors were never allowed to even shoot their vision, and thus when the film is re-cut, they must make do with the footage that exists. Examples of this include Terry Zwigoff's Bad Santa, Brian Helgeland's Payback, and most notably the Richard Donner re-cut of Superman II. Donner completed about 60% of the shooting of the sequel during the shooting of the first one, but was fired from the project. His director's cut of the film includes, among other things, screentest footage of stars Christopher Reeve and Margot Kidder, footage used in the first film, and entire scenes that were shot by replacement director Richard Lester which Donner dislikes but were required for story purposes.

Some directors explicitly dislike the phrase "director's cut" because it implies that they disapprove of the theatrically released cut. James Cameron and Peter Jackson are two directors who publicly reject the label, preferring "extended edition" or "special edition". While Jackson considers the theatrical releases of The Lord of the Rings and The Hobbit trilogies to be a final "director's cut" within the constraints of theatrical exhibition, the extended cuts were produced so that fans of the material could see nearly all of the scenes shot for the script to develop more of J. R. R. Tolkien's world, but which were originally cut for running time, or other reasons. New music and special effects were also added to the cuts. Cameron specified "what I put into theaters is the Director's cut. Nothing was cut that I didn't want cut. All the extra scenes we've added back in are just a bonus for the fans." (Though referring specifically to Avatar, he has expressed similar feelings on all of his films besides Piranha II: The Spawning.)

Extended or special editions can also apply to films that have been extended for television to film time slots, against the explicit wishes of the director, such as the TV versions of Dune (1984), The Warriors (1979) and the Harry Potter films.

The film Caligula exists in at least 10 different officially released versions, ranging from a sub-90 minute television edit version of TV-14 (later TVMA) for cable television to an unrated full pornographic version exceeding 3.5 hours. This is believed to be the most distinct versions of a single film.

The music video for the 2006 Academy Award-nominated song "Listen", performed by Beyoncé, received a director's cut by Diane Martel. This version of the video was later included on Knowles' B'Day Anthology Video Album (2007). Linkin Park has a director's cut version for their music video "Faint" (directed by Mark Romanek) in which one of the band members spray paints the words "En Proceso" on a wall, as well as Hoobastank also having one for 2004's "The Reason" which omits the woman getting hit by the car. Britney Spears' music video for 2007's "Gimme More" was first released as a director's cut on iTunes, with the official video released 3 days later. Many other director's cut music videos contain sexual content that can't be shown on TV thus creating alternative scenes, such as Thirty Seconds to Mars's "Hurricane", and in some cases, alternative videos, such as in the case of Spears' 2008 video for "Womanizer".

As the trend became more widely recognized, the term "director's cut" became increasingly used as a colloquialism to refer to an expanded version of other things, including video games, music, and comic books. This confusing usage only served to further reduce the artistic value of a "director's cut", and it is currently rarely used in those ways.